Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code
Form 1023 is an IRS application form submitted by non-profit organizations to obtain recognition of tax-exemption under IRS Code Section 501(c)(3).
PURPOSE OF IRS FORM 1023
Form 1023 is a form filed by organizations for the purpose of applying for recognition of exemption from federal income tax under IRS Code Section 501(c)(3). According to the IRS, an organization classified under Section 501(c)(3) must:
- Be organized as a corporation, trust, or unincorporated association, with an organization document that defines the organization’s purpose(s) and permanently dedicates its assets to exempt purposes and
- Operate to further one or more of the exempt purposes stated in its organization document.
Organizations that qualify for exemption under Section 501(c)(3) are commonly referred to as charitable organizations, and can be classified as either a public charity or a private foundation.
ORGANIZATIONS ELIGIBLE TO FILE FORM 1023
The following organizations are eligible to file Form 1023 for tax-exemption recognition under Section 501(c)(3):
- Churches, schools, colleges, universities, hospitals, or medical research organizations, as well as Section 509(a) supporting organizations
- Organizations that have not filed Form 1023 within 27 months of formation
- Homes for the elderly or handicapped and low-income housing
- Successor(s) to other organizations
- Organizations providing scholarships, fellowships, educational loans, or other educational grants to individuals
- Private foundations requesting approval of individual grant procedures
FREQUENTLY ASKED QUESTIONS
Can Form 1023 be e-filed?
No, Form 1023 cannot be e-filed. It should be filled out and mailed to the IRS.
How do I file Form 1023 with the IRS?
To successfully file Form 1023, you must mail the completed form along with any other required information and user fees to:
Internal Revenue ServiceP.O. Box 192
Covington, KY 41012
If you’re utilizing express mail or other delivery services, you can send your completed form and information to:
Internal Revenue Service201 West Rivercenter Blvd.
Attn: Extracting Stop 312
Covington, KY 41011
What information is required on Form 1023?
In order for the IRS to make a decision on a standard Form 1023 application, specific questions detailing an organization’s legal structure, its governing board, activities, and potential conflicts of interest must be answered. Additionally, existing organizations must provide three years of financial history; new organizations must supply a two year budget. A written narrative essay outlining the organization’s current and planned programs as they advance the exempt purpose must also be submitted. Depending on the organization, supporting schedules and documentation may be needed to complete the application package.
Can I file Form 1023 before incorporating my nonprofit?
Yes, but it’s not recommended. The IRS allows unincorporated associations to apply, but these organizations will not have the inherent benefits associated with the corporate structure. Additionally, the IRS still requires copies of an organizing document and will subject the organization to corporate requirements.
Is there a state version of Form 1023 that must be filed?
In most states, no. A handful of states have a short form that must be prepared when filing Form 1023. Double check with your state’s IRS office to see if they require a separate form. California is the only state that requires a separate application process rivaling that of the IRS; in California, federal tax-exemption does not eliminate state income tax liability until approval is received from the California Franchise Tax Board.
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